SPRINGFIELD, Ill. (WTVO) — Gov. JB Pritzker kicked off a series of tax relief programs for Illinois residents that begin going into effect on Friday, July 1st.
The Family Relief Plan totals an estimated $1.83 billion in relief, including income and property tax rebates and a temporary cut in several sales taxes.
“Starting tomorrow, every Illinoisan will get tax relief on essentials: groceries, gas, your home, and back-to-school supplies, with even more tax relief going into effect next year,” said Pritzker. “We are sending $1.8 billion in tax relief to Illinois families – and we are doing that because Democrats balanced the budget, eliminated the bill backlog, and state government is now running a surplus. In challenging times like these, it’s more important than ever to have a government whose first focus is on working families and those who are struggling, and leadership that provides new and creative ways to deliver relief when you need it most.”
Illinois will suspend tax on groceries and gas.
The temporary initiative, which will last one year, is designed to ease the effects of inflation on residents.
The plan going into effect on Friday will:
– Suspend for one year the 1% sales tax on groceries. The money collected is distributed to local municipalities, but the state would replace that funding.
– Freeze the motor fuel tax on gasoline for a year at 39.2 cents per gallon. To fund Pritzker’s $45 billion statewide construction plan in 2019, the tax was doubled to 38 cents and indexed to inflation annually. Without a freeze, it would increase 6.9% to 41.4 cents July 1. The state will waive the motor fuel tax increase which was due to increase on July 1st.
– Provide a property tax rebate up to $300. Every property owner can get an income tax credit of up to 5% of property taxes paid. For single filers earning less than $250,000, the state would double that 5% credit in the form of a rebate. This would cost the state an estimated $475 million.
Income and property tax rebates will be automatically issued to all of the estimated 6.2 million taxpayers who qualify under the Family Relief Plan based on information included in their submitted 2021 tax returns. Comptroller Susanna Mendoza will issue the rebates and expects to begin to cut checks the week of September 12. Distribution will take roughly eight weeks after the rollout begins.
In August, the state will offer a 10-day sales tax holiday on school supplies.
Sales taxes for qualified clothing and school-related items will be reduced from 6.25% to 1.25% for a 10-day window from August 5 to 14, saving consumers $50 million. Items include qualifying clothing and footwear with a retail selling price of less than $125 per item. Eligible school supplies are not subject to the $125 threshold.
In addition, the plan permanently expands the state’s earned income credit from 18% to 20% of the federal credit, while expanding the number of households covered.
The Associated Press contributed to this report.